A panel of industry insiders at the Consumer Electronics Show takes on the …

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LAS VEGAS—CES is best known for what seems like miles and miles of shiny consumer electronics, product demos, and expansive booths. But some of the most interesting action takes place off the beaten track of the show floor, in meeting rooms where players from opposite ends of the tech world come to discuss the issues of the day. Such was the case at this year's show. In a discussion called "The True Cost of DRM: What Can't We Do Now?" moderated by Paul Sweeting of Content Agenda, four panelists had different takes on impact of DRM over the past decade, while managing to agree that, when it comes to music, DRM is indeed dead.

The panelists included Patricia Aufderheide of American University, coauthor of a recent fair use primer for online content creators; Russ Frackman, a partner at the law firm of Mitchell Silberberg & Knupp who specializes in copyright, trademark, entertainment, IP, and technology litigation; Jonathan Lee, VP of business development for content-protection company Media Defender; Ian Rogers, general manager of Yahoo! Music; and EFF staff attorney Fred von Lohmann.

Ian Rogers began by making the pronouncement that DRM is done when it comes to music. "When it comes to music, we're set," he said. "Next question: do we have to go through all of this nonsense with video?" The answer, unfortunately, appears to be a resounding yes. "I think DRM in video is robust and healthy, and we'll be stuck with it for a long time," said von Lohmann, who then brought up a point we've touched upon repeated here at Ars over the years. "[DRM] is not about piracy. AACS has been broken and stayed broken through 2007," explained von Lohmann. "It's about controlling competition and eliminating disruptive innovation. If you want to play my content, I get to tell you how to build your player."

Surprisingly, Jonathan Lee of Media Defender agreed. "DRM is not an antipiracy tool," he said. "What we've seen in P2P networks is that DRM hasn't slowed it down at all. It just takes one person to crack it and it spreads virally... DRM and lawsuits really haven't changed the population, throughput, or bandwidth that is being consumed."

Much of the problem stems from the music industry refusing to give customers what they want for so long, Rogers argued. Drawing on his experience with Nullsoft in the late 1990s, he characterized the labels as being more concerned with creating scarcity where none was possible. "They have created such a large opportunity for pirated material by not giving people what they want," he concluded. Lee also shared some similar experiences, but then said that it's a mistake to pigeonhole labels as obstinately refusing to do the right thing. "There are some bright people [at the labels] who want to do some interesting things."

It's apparent that the labels are finally listening to the bright people, given the way that DRM is being dropped from the big four labels' catalogs and how the industry has embraced DRM-free streaming services like iMeem.

From DRM to filtering

Speaking up for the rights-holders, IP attorney Russ Frackman was quick to argue that infringement is still a major problem. "Everyone on the panel recognizes that there's a real piracy problem that has been facilitated by the Internet," he said. "We all know that a lot of what is going on with P2P sites is widespread, full-scale copying with viral distribution of the material. Copyright owners are justifiably looking or a way to combat it."

The discussion then turned to the question of whether filtering was a "reasonable approach" towards achieving the content owners' goals of controlling the unauthorized spread of content and how much the economic burden of developing effective filters should factor into the discussion. Professor Aufderheide expressed a well-founded concern that purely technological measures were inadequate to task, given the future of culture. "What's at stake here are really the core values of our political culture: freedom of expression and the First Amendment, and second, the core of copyright law, the fomenting of new culture," Aufderheide claimed. "That really can't be defended on the basis of whether it's going to be expensive or cheap for Viacom to address this issue."

Frackman took issue with Aufderheide's singling out of Viacom. "What about the other side of the equation? How much are YouTube and Google going to pay?" he asked.

"They built a filter Viacom didn't pay for," countered von Lohmann.

The panel was then asked if the key for content creators was monetizing piracy. Von Lohmann and Lee agreed that it was, while Frackman said that monetizing piracy legitimizes it. "When you monetize piracy, you're saying that it's no longer piracy," he argued. "Copyright holders may determine that it's best not to license certain uses because they impinge on other uses.

"What we're missing here is the third leg of the stool," he continued. "We're not talking about the businesses that use copyrighted material for their own commercial purposes. What is their obligation to filter?"

Frackman the brought the Grokster case into the discussion, saying that failure to effectively filter could leave companies open to a finding of infringement.

That's the crux of the issue, especially in the Viacom v. YouTube copyright infringement lawsuit. Viacom, like other rightsholders, believes that many UGC sites have a business model built on infringement, profiting from their users posting content without permission. UGC sites argue that the onus of copyright enforcement is on the rightsholders.

A consortium of companies including the major TV networks, Viacom, and Microsoft last fall published a set of user-generated content principles. While nodding in the direction of fair use, the principles would require sites to employ filters that would prevent infringing content from ever being made available. Those don't go far enough, argued von Lohmann. "Video fingerprinting is very primitive. Fair use is hard, as it requires a human to look at the video. There's no filter near being capable of separating fair use from something that's not fair use." That's why the EFF, Public Knowledge, and a handful of other groups posted a set of UGC copyright principles of their own. Those principles would keep "fair use dolphins" from being ensnared in a net intended for "infringing tuna."

"I'm thrilled I'm not part of the industry that has to solve the problem," cracked Aufderheide. Continuing on a more serious note, she said that the creative issues are critical to the discussion. "We are really talking about the emergence of a whole new participatory culture, the emergence of a new and potentially dominant set of cultural practices."

Unfortunately for both the industry and users, there are no easy solutions for the quandaries everyone is facing. For a free culture to thrive, users need to be able to use content in new and transformative ways; indeed, that's much of what Hollywood does. But for content creators to thrive, they need to be compensated to a degree that makes producing new content a worthwhile endeavor. In the best of all possible worlds, it would be an issue for the market to sort out. But when content creators are using technological measures to hamstring consumers who want to consume content on their own terms, the sorting out process becomes far more difficult, if not downright impossible.